Many organisations now seek to voluntarily offset their carbon
emissions in an effort to become more 'carbon neutral' and
in recent years there has been a proliferation of carbon neutral
claims and carbon footprint calculation methodologies. However, the
lack of a standardised approach to carbon offset calculations has
meant that the veracity of 'carbon neutral' claims is
difficult to gauge.
In December 2008, the Department of Climate Change released its
National Carbon Offset Standard (Draft
Standard) for public consultation. The Draft Standard
specified the types of domestic and international carbon credits
that should be used to legitimately and genuinely 'offset'
carbon footprints. The Draft Standard aimed to provide a national
standardised approach to the management and calculation of
voluntary carbon offsets and carbon footprints. The Draft Standard,
which relates solely to voluntary emission reductions, will
supplement the mandatory Carbon Pollution Reduction Scheme
(CPRS) when it is introduced.
More than 100 submissions were lodged in respect of the Draft
Standard. Following public consultation, the Federal Government
released its revised Final Standard in January 2010 (Final
Standard). The Final Standard will commence operation on 1 July
2010. A number of significant changes were made to the Final
Standard, as compared to the Draft Standard, which we consider
Whilst the Draft Standard specified that the only international
carbon credits that could be used to offset an organisation's
carbon emissions were certain international Kyoto emission units,
the Final Standard has increased the type of international carbon
credit units that can be used. International emission units that
are issued by either the 'Gold Standard' or the
'Voluntary Carbon Standard' will now be included
as eligible emission units, in addition to the units specified in
the Draft Standard.
The Draft Standard provided that a range of domestic carbon
credits could be used to offset carbon footprints. These included
Australian Emissions Units (issued pursuant to CPRS) and also
carbon offset units generated from emissions sources in Australia
that complied with the Draft Standard's methodology and
eligibility criteria. The Final Standard has limited the types of
domestic emission sources that are eligible for the generation of
domestic offsets. Eligible emission sources are now limited to
emission units generated from forest management practices (in
forests established before 1990), revegetation through the
establishment of woody biomass that does not meet Kyoto forest
criteria and cropland and grazing land management.
Unlike the Draft Standard, the Final Standard provides detailed
methodologies and calculating requirements in respect of Carbon
Footprints. The Final Standard also requires that a Greenhouse Gas
Emissions Inventory Report be prepared and that the
organisation's boundary (for the purpose of its carbon
footprint calculations) be transparently documented. The Final
Standard also requires that in calculating carbon emissions, an
organisation must take into account its 'scope 3 emissions'
which include business travel of its employees, waste generated by
the organisation and also the organisation's use of paper.
In order to be entitled to use the Carbon Offset
Standard logo, an organisation must develop an Emissions
Management Plan which must include an emissions reduction strategy.
Following an independent audit of an organisation's carbon
footprint calculations, and the Emissions Management Plan, an
organisation may then complete an agreement to use the National
Carbon Offset Standard logo. The logo will confirm that the
organisation or its product has achieved 'carbon
neutrality'. Following the achievement of 'carbon
neutrality' an organisation will need to continue to report and
audit its emissions reductions and offset activities on a regular
basis (although the Final Standard does not specify how
frequently). The Audit progress reports should be made publically
If you would like further information on the Final Standard or
the CPRS, please contact a member of the
Climate Change team.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The article examines the regulation of the oil and gas industry and breaks down the regulatory process state by state.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).